The contract, which will be worth up to £88.5m over four years, includes the London boroughs of Barking and Dagenham, Brent, Lambeth and Lewisham, which are existing Oracle users. It is hoped other councils - including Croydon and Havering - will join the shared services deal at a later date.

The contract titled Unified Communications over Regional Networks (Unicorn) was been put out for tender on the Official Journal of the European Union.

It is asking for bidders that provide integrated network systems and services as well as telecoms suppliers.

The supplier will be tasked with providing services, including managed wide and local area networking and IP voice services, to public sector organisations, provide the ongoing management of contracts within the overall project, as well as technical, commercial, migration, training and support. The service provider will be expected to work alongside staff from the public sector who will provide specialist business and procedural expertise.

- Also this month came news of seven Scottish councils joining up services in a move that is expected to save around £30m a year. The participating councils include Glasgow, Inverclyde, East Renfrewshire, Renfrewshire, East Dunbartonshire, West Dunbartonshire, and North Lanarkshire.

Staff numbers under the new shared services model are expected to decrease by around 25% over time, which could see more than 100 IT roles go. IT is the most expensive function across the councils with a total cost of £58m per year.

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My understanding is that West Dumbartonshire is pulling out of the Clyde Valley shared services scheme.

They know that there is no evidence to support shared services, just estimates, projections and surveys generated from within the shared services industry.

Professor John Seddon, an expert in service organizations with extensive experience in public sector systems says that there are two arguments for sharing services. The ‘less of a common resource' argument and the ‘efficiency through industrialisation' argument.

The former argument is ‘obvious': if you have fewer managers, IT systems, buildings etc; if you use less of some resource, it will reduce costs. But the reductions are often minor and one-off.

The second argument is ‘efficiency through industrialisation’. This argument assumes that efficiencies follow from specialisation and standardisation – resulting in the creation of ‘front' and ‘back' offices. The typical method is to simplify, standardise and then centralise, using an IT ‘solution' as the means.?The problem with the industrial design is simple - it doesn't absorb variety in demand. Because of this, costs soar as the IT system has to be modified and customers ring back again and again because they can't get what they want.

Worse still once shared, costs can be locked-in by contracts, SLA agreements and other un-evidence and poor management practice.

The evidence of this flawed theory can be found everywhere. In HMRC or South West One shared services which predicted savings of $176 million over 7 years and actually recorded a pre-tax loss over its three financial years. Duplicate payments sitting at $772,000 and a struggle to manage $12.9m in outstanding debts.??

This year Western Australia followed Queensland in ending its shared services. It was claimed that it would save $58 million a year and instead cost $444 million dollars (no savings). It is estimated that it will cost taxpayers between $1 - $2 billion dollars to rectify.